spread betting

Jason Donohue

Looking to become an independent spread betting trader but have very little idea on taxes on how much income tax do I pay on my profits

srsly78

Same tax as you pay on any other income. However you can't offset losses I believe, unlike in the UK.

Marcusm

srsly78 wrote: »

Same tax as you pay on any other income. However you can't offset losses I believe, unlike in the UK.

Do you care to cite any authority for your three statements, each of which I believe to be incorrect?

Spread betting like any form of gambling does not generally give rise to any income or gains liable to income tax or capital gains tax nor to any losses which provide relief for those taxes. However, to the extent that an individual's gambling activity amounts to a trade, Revenue may seek to tax any profits arising under Case I of Sch D. In the past, some noted horeseracing gamblers have sought to offset losses which efforts have been successfully resisted through the courts.

This is a historic position arising from the fact that the perception was (and remains) that losses are more likely than profits and it introduces uncertainty into the tax raising process.

The use of spreadbetting as a means of gaining exposure to stock market investments has proliferated over the past decade and one of the marketing points in Ireland and the UK has been the absence of tax when compared with CFD products which are generally taxed and relieved as capital gains/losses (being financial future or traded option products).

At this stage, there is little reason to maintain the distinction between financial spreadbetting and derivative financial products. However, from a policy perspective, I suspect that Revenue would see it as creating an opportunity for naughtiness.

srsly78

I take it back, it seems to be treated the same as gambling here.

FinTrade

You don't pay any tax on your profits from spread betting (whether it's sports spread betting or financial spread betting).
PS: these laws are for the UK and Ireland and can be different in other jurisdictions.